Post-Covid-19 Canadian Housing Sales Market:
Natural catastrophes and global pandemics have a direct effect on our lives, work, and growth opportunities. This also applies to the selling and buying patterns of individual consumers as well as corporations. With the onset of Covid-19 and its peak months in the last year, majority of the population had to stay indoors, limiting their outdoor access to recreational sites, their dining out patterns and realizing the necessity of working from home. This made people take notice of their small kitchen areas, tight verandas and lack of potential office space within their homes.
During the pandemic peak, the surge in buying spacious houses witnessed a record-breaking pattern. Homebuyers was willing to make room in their budgets for higher asking price in return of a more spacious and functional home. They also realized that they had more room in their budgets because vacations and daily commutes to work suddenly became unnecessary.
However, since March 2021, the surge in house sales have started to go down as things have started to return to normal and people are taking time to analyze where the current Covid-19 situation will lead to. The numbers in house sales varied from one city to another in Canada; however, it is worth noting that it is a gradually declining slope.
This is the very reason why the current average home selling prices have gone down since the month of March 2021 with an estimate drop of about 5.3%. Furthermore, average home prices range from six hundred seventy thousand to around seven hundred thousand dollars. Despite the odds in the statistics, the Canadian housing market is still up by 26% compared to the March 2020. Overall, if you go for a yearly sales statistics, the Canadian House Sales are witnessing a growth rate with regard to every passing year.
Let’s take into account some of the cities in Canada to understand how the house sales markets are responding to post-covid-19 era since the month of March 2021.
Toronto is the most favorite market for housing sales for buyers. Here, the prices of the houses are standing at a deficit of 1% from March 2021. In Hamilton, this percentage of deficit is 2%, in Ottawa 2.6%, in Vancouver 4.6% and in Edmonton, 3.2% and for Calgary this percentage stands at 2.3%. The only city where the house sales prices have gone up is Winnipeg, with an average increase of sales prices by 4%.
Post Pandemic Mortgage Rates Situation:
The mortgage rates have remained stable since last year.
Canadian Mortgage and Housing Corporation (CMHC) reversed the increase it deemed fit to impose on mortgage insurance, credit score requirements and debt service limits this year.
On the other hand, the Mortgage Stress Test benchmark has increased in June 1, 2021.
The Mortgage Stress Test determines how much you can afford with your current income and financial circumstances to make sure you can still afford to pay your mortgage instalments, in case your current financial situation changes. The qualifying ability of the buyers may decrease as a consequence of the current requirements in the score for the Mortgage Stress Test. This may lead to a decreasing shift in the housing market of Canada.